Carson Wood Products Processes Logs into Four Grades of Lumber

question 121

Multiple Choice

Carson Wood Products processes logs into four grades of lumber totaling 500,000 board feet as follows at a joint cost of $300,000: $$\begin{array} { l c c } \text { Grade } & \text { Board Feet } & \text { Final Sales Value } \\\text { First and second } & 75,000 & \$ 56,250 \\\text { No. } 1 \text { common } & 200,000 & 180,000 \\\text { No. } 2 \text { common } & 100,000 & 105,000 \\\text { No. } 3 \text { common } & 125,000 & 127,500\end{array}$$ What is the gross profit of No. 3 common if the constant gross margin percentage method is used?

• A)$135,000
• B)$81,600
• C)$45,900
• D)$168,750

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